Thursday, February 26, 2009

The Math Does Not Work

Russel Roberts over at Cafe Hayek notes that the math is not matching the rhetoric:
The new deficit number for 2009 came out today: $1.75 TRILLION. To cut that in half he needs to reduce spending or raise taxes by 800 billion. As I point out in this piece, let's assume he really can find $200 billion annually in spending cuts. That leaves $600 billion in tax increases for the top 2%. The top 2% currently pay about $500 billion in taxes. There are about three million taxpayers in the top 2%. They currently pay an average of about $167,000 a year in income taxes. So to cut the deficit in half (half--still leaving a deficit of over $800 billion) he will have to raise their tax burden by another $167,000.
Not gonna happen. We are all going to pay. I just wonder how long it will take to sink in to the average taxpayer and the required tax rate changes are proposed. Time to re-read The End of Properity.

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